Three big taxpayers upset with city assessments

Published 8:00 pm, Monday, March 11, 2002

The Dow Chemical Co., Dow Corning Corp. and the Midland Cogeneration Venture officials say they'll meet with the city's Board of Review this week to protest the city's switching some of their personal property to real property, which takes longer to depreciate.

By By Cheryl Wade and Kathie Marchlewski of the Daily News

As a years-old tax appeal battle continues to play out, three of Midland's biggest taxpayers say they'll object this week to a new round of property tax hikes.

The Dow Chemical Co., Dow Corning Corp. and the Midland Cogeneration Venture officials say they'll meet with the city's Board of Review this week to protest the city's switching some of their personal property to real property, which takes longer to depreciate. Real property is land and buildings, while personal property is equipment.

All three companies have appealed property tax assessments dating to 1996, saying they are too high. The MCV's appeal is before the Michigan Tax Tribunal. Dates for hearing the Dow Corning and Dow appeals haven't been set.

According to city officials, the total assessed value of Dow Corning property  real and personal  rose 15 percent from 2001 to 2002. What upsets Dow Corning tax supervisor Joseph Mulders is that the city more than doubled the company's real property value, increasing it from $29.6 million to $60.1 million. Mulders said he wonders if the city is engaging in harassment because Dow Corning challenged the city's assessments years ago.

Mulders said Dow Corning's assessments haven't changed much in recent years. When he received this most recent assessment notice, he thought at first there was a mistake. He said that when he asked City Assessor Kathleen Paul about it, she told Mulders he would have to talk to a Detroit-based accountant the city had hired. Mulders expressed frustration over the lack of information he was given before the meeting with the review board.

"I don't know what to say to the Board of Review unless I know what methodology they're using," he said, referring to the city.

The city increased Dow's total assessed value by $40 million, or about 8 percent, said Mark Recker, Dow's property tax consultant. The city audited Dow last year to gather information for its defense in the tax appeals, said city Fiscal Services Director Robert Fisher.

Chief among the issues, Recker said, was Dow's classification of what it termed personal property, but which the city termed real property. Recker said Dow would have liked to take the issue to the Michigan Tax Commission before the results showed up on its assessment.

"They … put a much higher value on it when they moved it to real estate, so it wasn't a one-for-one change," he said.

Fisher said the assessor is bound by her profession not to ignore problems. When the city inspected Dow and Dow Corning properties, they found some problems with how some of the property was being recorded.

Dow said its rolls were accurate, and Mulders said assessing is so complicated that individual structures inside a plant can get missed.

"There is just way too much stuff to say that it's perfect," he said.

Paul told the Daily News that for Dow Corning's latest assessment, she took a personal tour of the property and factored in remodeling and renovations. It's a process that takes place every year, she said.

"It may seem like retaliation, but it's not," she said. "We're doing everything we can to get this (dispute) solved."

Gary Pasek, MCV vice president and general counsel, said the city raised the value of the main piece of the plant from $559 million to $759 million. Fisher said that's because the city assessed the property in a different way this year. Instead of increasing the value based on its value last year, the city looked at the plant's purchase price.